Purchasing real estate is considered to be a smart investment – and it is, but only if you know how to make a good purchase, because otherwise it’s a double-edged sword that can make a permanent mark on your overall finances.
Whether you’re buying your first home, moving or getting a beach house, you should always stick to the same thorough routine – that is the only way to be certain about your decisions and not to regret them later.
First of all, you need to take your time – in a majority of situations where mistakes occur it’s because people are hasty. Now, you may be in an unpleasant situation where your housing problem is quite serious, but my sincere advice is to solve it temporarily, so you have a roof over your head and enough time to think things through. The fact is, you may not be able to correct mistakes as big as this one so soon – it’s your future at stake.
Next, you should approach your problem from three different aspects – your realtor, general market and the property itself. Each of those three factors plays an important role, so let’s go over them thoroughly.
First of All, Interview Your Agent
You need a reliable professional who will be able to take care of your needs and put them in front of theirs – a person like this is hard to find. Therefore – an interview is in order.
- Ask Them about Previous Experience
Start by talking things out and ask them about their previous experience. This simple question will show you how much they actually enjoy their job and how they approach each client. My suggestion is to ask for a recommendation and also contacts of past clients if possible.
- Why Are They the Right Person?
They need you as much as you need them, so you should let them convince you they are the right person for the job. What is it that makes your potential realtor different from all other ones? Do they understand your needs and are they willing to go the extra mile to provide you with the perfect home?
- What Is Their Fee?
First of all, you need to understand there’s a difference between a real estate agent and a realtor; a realtor is a member of the National Association of Realtors and they are bound to respect the Code of Ethics by the law. Both of these job descriptions require certain licenses so real estate agents and realtors both are allowed to sell real estates. The next degree of expertise here, which requires passing further exams, is being a broker.
When you figure out the exact job description of the person you’re interviewing, you should ask them about their fee and whether they work alone or in a team so that you know exactly what kind of billing you might expect and whether it’s fair.
- Do They Represent the Sellers?
This can be a factor, especially if you hired a real estate agent because they are not required to act according to the Code of Ethics, so make sure to check whether they represent the sellers of a property you’re interested in when the time comes.
- Ask About Their Company Policy
If you decide to work with a company instead of hiring a free agent, you should study the way they function. You can predict your future business relation by studying them, so feel free to ask what happens if you’re not satisfied with their services and whether they’ve had any legal issues so far.
You should also dig deeper into their way of doing business, so find out when that company was founded, what kind of real estate property manager software they use and how many members their team counts. If you encounter a negative attitude and if they refuse to answer these questions, you have a reasonable doubt for suspicion.
Now, Get Familiar with the Real Estate
After you hire the right person for the job, you should transfer your focus to getting informed about and inspecting specific real estate properties.
- Value of the Area
The general value of real estate properties in a particular area should be an important pointer to whether a certain price presented to you is fair and how much room for negotiation there is. You should also find out whether their place is popular and how many interested buyers there are.
- Is It Properly Listed?
Once you encounter something you like, it’s time for further research and this type should be on a legal basis. It’s not at all uncommon that buyers get all the papers necessary and that they sign the final contract, only to later find out that a home isn’t properly listed or that there’s something wrong with a building permit (or lack of it), so make sure to check this.
- Where There any Large Repairs and Why?
It doesn’t really matter if you’re purchasing an apartment or a house, you should find out if the contractors had any work done recently and why that is. This will solve the mystery of the potential problems you might expect in the future.
- Has that Real Estate Changed Owners often?
If so, you should be aware of the fact that there’s something wrong with the property itself, the neighbors or something else, but it’s obviously something big, considering the fact that none of the previous owners could stay there.
- Utility Billing
One of the reasons why a certain real estate changed owners might be utility billing – it’s imperative for you to remember to ask this question. Purchasing a property that you can’t maintain is like getting an attractive vehicle without having enough money to pay for gas or its spare parts.
- Ask around the Neighborhood
Although realtors are bound to tell you the truth, they might decide to leave something out or do so by accident. Taking a walk through your potential new neighborhood will help you get to know it better and you should talk to people who might be your new neighbors. They have no reason to be dishonest with you, so you should ask them about the overall safety of their neighborhood and crime rates, as well as taxes and other topics we mentioned up until now.
Make a Checklist and Stick to It
It’s quite simple to take advantage of a buyer who doesn’t know anything about real estate, building structures, quality materials and proper installations. However, having the following checklist in mind or in a physical version on a paper in front of you (which may be a smarter option) can be very helpful.
- Switches & Plugs
The easiest way to check the plugs is to have your smartphone charger with you – it will take a second for each one. Also, make sure to test all light switches and make sure not to miss any of the rooms. The smallest sign of light blinking points to old or improper electrical installations.
- Taps & Pipes
You should insist on trying out all taps and check the water flow – if you happen to hear any odd noise, you should have a couple of following questions regarding the pipes: when were they installed and were there any repairs recently?
- Walls, Attic & Basement
Materials used to build a building you’re interested in are an important factor that should affect your decision whether to get it or not. This can be checked with simple knocking – if you notice that the walls are hollow, you can expect to have issues at the first sight of harsh weather. If you’re looking at an apartment, hollow walls can cause serious problems with your neighbors.
If you’re looking for a house, you should conduct a thorough inspection of attics and basements. It would be great to wait for rainy weather and inspect that building during or afterwards, so you can check if there’s any mold or leaks. Sometimes agents tend to cover up the smell of mold with various fresheners, so keep an eye out for that too.
It’s an Expensive Commitment
You may not be ready to have a property of your own – it’s an expensive commitment that takes a lot of your time. Everyone should have their own house and make a home of it in time, but there’s nothing wrong with waiting for a good moment. A simple question should solve this dilemma for you – how much time will you be spending in your new home? Answer it realistically and you’ll be able to solve your problem, as well.
I know I already mention this in the beginning of this guide, but I’d like to emphasize its importance – take your time. You should process each piece of information properly and have enough room to discuss every single issue with your family and friends – you shouldn’t hesitate to ask for help with this matter, because another perspective can be highly helpful. Good luck!